Car tax UK – Could tax soon be replaced by a pay as you go system?

Car tax has changed a number of times over the past two years, altering how much motorists pay.

New research has suggested that nearly half the population would be in favour of a pay-as-you-go charging system for tax.

The Institution of Civil Engineers (ICE) found that 47 per cent of the population would prefer to see current vehicle excise duty streams replaced.

ICE undertook the research into current infrastructure in the UK to evaluate how it would work and support a switch to electrification in future.

It made the recommendation to Government on new revenue streams for the road network in recognition that as progress is made toward electric vehicles and cleaner fuels, traditional taxation and duty charges would begin to dwindle.

Electric cars and low emissions vehicles don’t pay much, if any, tax at all in the which would mean that if a larger proportion of motorists switch to electric cars, the revenue generated by VED would rapidly decline.

Earlier this year the ICE launched the State of the Nation 2018: Infrastructure Investment.

Paul Sheffield, ICE Vice President and Chair of the SoN Steering Group said: “It’s important that we recognise the changing societal landscape and adapt accordingly – moving towards an electric vehicle fleet will require a change in the way taxes are charged and collected, just as a change in emerging technologies will require variation in how energy is stored.

“This report makes recommendations to government as we work together to create a sustainable future for infrastructure.”

Professor Lord Robert Mair, ICE President, said: “We face a time when the demands on infrastructure services are changing and increasing, with pressures from population growth,ageingdemographics, increasingurbanisation, and resilience issues due to climate change.

“To respond to these in the long-term, and remain globally competitive, we must have an open and robust debate about how to fund our future infrastructure needs – and encouraging private investment must be considered.”

Changes to car tax in the UK were announced earlier this year.

In April, increased rates for new diesel car drivers were introduced, which would see owners pay one band higher tax.